American Tower Corp (AMT)

cell phone growth usage still on the rise

Cellular service is still in expansion mode and AMT is positioned to continue growth in this environment.

they have a fixed contract for the next 6 years that will ensure profits.

Great time to buy.

Low Sales and Few Employees for Capital

Smartphone usage on the rise... these guys are the biggest tower company.

cramer's pick (I know!) for cell towers and smart phone increasing band width

This company most recent return on equity was about 8%. In prior years, the company lost money. Although the company has good growth prospects and a reasonable business plan, it is simply overvalued at 4 times book and 50 times 2009 earnings.

Has a lot of room to grow

american

they are needed Everwhere.

While this company has very good growth prospects if the world doesn't experience The Great Depression Act 2, it is currently valued as if the company will be able to massively increase earnings year after year. While their revenue growth has been fairly consistent, their net income hasn't been as impressive from a consistency standpoint. A major risk that I think they'll face, is an inability to secure enough financing to grow as rapidly as the market expects. They only have an interest coverage ratio of about 2.5 which while not bad, doesn't leave them much room to expand their debt and still have a decent margin of safety. If that risk materializes I would expect the PE of this company to roughly drop in half, as the market gets used to the idea of slower growth from this company.

The wireless sector is only going to grow. Even in a down economy the wireless sector will ikely thrive as people ditch their home phones and continue with their cell phones. The continued growth in the smart phone sector will also mean more towers and more data transfer on those towers...more money for companies like AMT

here we are in a new economy - within a deleveraging landscape. these companies are the biggest & baddest that have beaten the S&P 500, however, upon closer look these companies valuations appear too high, future growth is constricted by debt levels, and already have pretty high institutional ownership for its size.
this stock will not double in the next 5 years...but if it does, thats bcuz most of the other stocks in your portfolio have tripled or done much better during that time frame.
SHORT TEF, PG, COST, WMT, VMC, AMT, ESRX, MLM

With the additional build out required for newly acquired and and auctioned spectrum, they will be busy the next couple of years.

Growth stock! Psych. Bubble stock - waaaaaay overvalued.

They have high debt and their P/E is off the chart at 57. Extremely over valued right now.

too much compitition in wireless service, but the industry has a lot of devlopment as a whole, especially with 3G and 4G networks. AMT is probably a more reliable way to tap into this.

AMT owns and leases broadcast communication towers to wireless/wireline/radio/cable operators on a long-term basis. They have a stable and consistent revenue stream as most contracts are in the 15 year range and with only a handful of operators in this space the demand will outweigh supply as the race to build more towers is on. The debt/equity seems high at first glance but is in line with competitors, as debt and securitization financing is used to fund new towers. With all of that being said, debt costs have increased and new deal financing has obviously dried up. The stock is retesting its all-time high just above $46 but we don't foresee a breakout, but rather a topping pattern forming. With a great reward/risk for a short trade, we are long October $45 Puts as we see 7-8 points of downside over the next few months and have a stop loss just above the all-time high of $46.53.